Difference Between Voluntary and Compulsory Redundancy
Voluntary redundancy and compulsory redundancy are corporate terms which are widely heard in times when the management of company decides to downsize the strength. In today’s unstable and unpredictable economic scenario, redundancy is a dreaded word. In the recent global meltdown, millions of employees have lost their jobs to redundancy. Voluntary redundancy and compulsory redundancy, however, are two different words. Even though, in redundancy of both types, there is no fault your own. In this case, company would compensate you some amount which is known as redundancy compensation. If a company fires you and hires someone else at your place, that would not be termed as redundancy.
When an employer declares an option to take voluntary retirement to downsize, it is called voluntary redundancy. It often entails some compensation. It is the least painful way as employees are free to either take or leave it whereas in compulsory redundancy, management decides the ones who should stay aboard and the ones who should left. This can be very difficult for the employees.
If no person turns up for voluntary redundancy, the company management decides to choose the persons itself and asked to leave. This can be then, deemed as compulsory redundancy,